Adding to the damage was the Bank of Japan's quarterly survey of business sentiment called “tankan,” which highlighted the gloom over a likely recession. The world's third largest economy had already been lagging for months when the outbreak began taking its toll earlier this year.

Business

Sentiment among Japan's large manufacturers fell in the January-March period, marking the fifth straight quarter of decline, according to the central bank. The tankan measures corporate sentiment by subtracting the number of companies saying business conditions are negative from those responding they are positive.

The key index, which measures sentiment among large manufacturers, fell to minus 8 from zero in October-December, the worst result in seven years. Sentiment among non-manufacturers was also dismal as the service sector, tourism and other businesses have also been hit hard by the outbreak.

Australia's S&P/ASX 200 added 3% to 5,229.40, while South Korea's Kospi slipped 0.5% to 1,745.17. Hong Kong's Hang Seng lost 0.9% to 23,384.93, while the Shanghai Composite inched up 0.1% to 2,753.18.

On Wall Street overnight, stocks plunged to close out their worst quarter since the most harrowing days of the 2008 financial crisis.

The S&P 500 dropped a final 1.6%, bringing its loss for the first three months of the year to 20% as predictions for the looming recession caused by the coronavirus outbreak got even more dire. Stocks haven’t had this bad a quarter since the last time economists were talking about the worst downturn since the Great Depression, when the S&P 500 lost 22.6% at the end of 2008.

The surge of coronavirus cases around the world has sent markets to breathtaking drops since mid-February, undercutting what had been a good start to the year.

But the virus outbreak abruptly put the clamps on the economy. Benchmark U.S. crude oil dropped by roughly two thirds this quarter amid expectations for weaker demand. The yield on the 10-year Treasury dropped below 1% for the first time as investors scrambled for safety, and it ended the quarter at roughly 0.67%.

The Dow Jones Industrial Average of 30 U.S. blue-chip stocks dropped 23.2% for its worst quarter since 1987.

Markets have cut their losses in recent weeks on hopes that massive aid from governments and central banks around the world can blunt the blow. The S&P 500 was down nearly 31% for the quarter at one point, but it has climbed 15.5% since last Monday.

The Fed has promised to buy as many Treasurys as it takes to get lending markets working smoothly after trading got snarled in markets that help companies borrow short-term cash to make payroll, homebuyers get mortgages and local governments to build infrastructure. Congress, meanwhile, approved a $2.2 trillion rescue plan for the economy, and leaders are already discussing the possibility of another round of aid.

It's impossible to know when infections will peak and the markets will reach bottom.

“We’re kind of on this little milestone journey with markets,” said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management Co. “First, we get the economic plan in place, then we have to start to see some of the containment actions pay off. At some point it’s going to be how do we get back to work.”

Among the next milestones for investors is Friday's U.S. jobs report, which will likely show a sharp drop in payrolls. Companies soon will begin reporting their earnings results for the first quarter. Analysts are looking for the steepest drop in profits since early 2016, according to FactSet.

The numbers may get even worse in this quarter.

Goldman Sachs economists said Tuesday they expect the U.S. economy to shrink 34% in the second quarter, but recover in the second-half of the year.

The S&P 500 fell 42.06 points to 2,584.59. The Dow Jones Industrial Average lost 410.32, or 1.8%, to 21,917.16, and the Nasdaq was off 74.05, or 1%, to 7,700.10.

The relatively modest moves are a big departure from earlier in the month, when huge swings punished investors. The S&P 500 had its worst day since Black Monday 1987 on March 12 with a 9.5% loss, for example, only to outdo itself with a 12% drop two trading days later. Sandwiched in between was a 9.3% surge.

The number of known coronavirus cases keeps rising, and the worldwide tally has topped 850,000, according to Johns Hopkins University. The United States has the highest number in the world: more than 188,000 people.

Most people who contract COVID-19 have mild or moderate symptoms, which can include fever and cough. But others, especially older adults and people with existing health problems may get pneumonia and need to be hospitalized. More than 42,000 people have died worldwide due to COVID-19, while more than 178,000 have recovered.

"We're still not even close to peak coronavirus in the U.S. which has already reported more cases than any other country and will sadly likely see a huge spike in the number of deaths, meaning further lockdown measures will likely follow,” said Craig Erlam, senior market analyst at OANDA Europe. “Huge challenges still lie ahead.”

ENERGY: U.S. benchmark crude gained 10 cents to $20.58 a barrel in electronic trading on the New York Mercantile Exchange. It gained 39 cents to $20.48 a barrel Tuesday. Brent crude, the international standard, lost 42 cents to $25.94 per barrel.

CURRENCIES: The dollar cost 107.87 Japanese yen, up from 107.52 yen on Tuesday. The euro fell to $1.1017 from $1.1034..